Lawmen chase YBM Magnex into receivership
TORONTO (CP) -- YBM Magnex International, Inc., a troubled maker of bicycles and industrial magnets, intends to go into receivership -- pursued by law-enforcement authorities.
The board of directors has been advised by YBM lawyers "that YBM is certain to be indicted by a grand jury in the United States ... and there is good reason to believe that the U.S. authorities will be able to marshal substantial credible evidence of criminal wrongdoing," the company said in a news release late Tuesday.
YBM has applied to Alberta Court of Queen's Bench to have Ernst and Young named receiver and manager.
YBM noted that an audit last spring by Deloitte and Touche raised concerns about transactions in Eastern Europe, and "indicated that certain individuals associated with these entities and certain other related entities are reputed to have ties with organized crime."
On May 13, YBM's head office in Newtown, Penn., was searched by the FBI, Internal Revenue Service, Immigration and Naturalization Service, U.S. Customs Office and other American authorities.
On the same say, the Ontario Securities Commission halted trading in YBM shares, followed by the Alberta Securities Commission.
"Formal investigations or proceedings relating to YBM are ongoing in the United States by the Organized Crime Strike Force and in Canada by the ASC and the OSC," the company said Tuesday, and this has "created a significant state of uncertainty and resulted in a material deterioration in the business and financial condition of YBM."
The current board, which intends to resign when the receiver takes over, took control after YBM shareholders won an order from the Alberta court last September replacing most of the previous directors.
The company said Tuesday it has uncovered unexplained transactions that have Òseveral indicia of money laundering,Ó and YBM Òmay well not be able to defend a criminal indictment initiated by the U.S. authorities.Ó
YBMÕs president has quit and Òit will be virtually impossible to find a suitable replacement for him.Ó
The statement says parts of YBMÕs operation, particularly in Hungary and elsewhere in Eastern Europe, are out of control, and the board lacks Òthe ability to adequately or responsibly supervise YBMÕs ongoing business and affairs to ensure that such business and affairs are lawfully and appropriately conducted.Ó
TuesdayÕs statement sees Òno real likelihood of the shares of YBM ever resuming trading or for YBM to have access to financing.Ó
With cash flow negative and assets dwindling, Òa court-supervised process is the optimal method available to preserve and realize on the assets of YBM and its subsidiaries for the benefit of all its stakeholders.Ó
The board concludes that Òshareholders of YBM have no reasonable prospect of being able to sell their YBM shares and no means of liquidating their investment.Ó
canoe.ca
Hope you're well, Adrian .... I hear you've turned to music ... well, come sing us a song #Subject-23794
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... aw, lurk the whole thread if you've got the time ... Valdy probably wouldn't mind if you did 'Sell me a pump 'n dump stock' to the tune of 'Play me a rock 'n roll song' -g-
....... cheers, man |
